Perkins School for the Blind CEO explains how companies can create 'unlimited growth'

About three months ago, Dave Power, a former partner at Fidelity Ventures and Charles River Ventures, took over as CEO and president of Watertown's Perkins School for the Blind. Power, a 61-year-old Newton resident, is a parent of a Perkins graduate and for the past eight years, he has been a trustee at the 185-year-old school (Power's oldest son was born blind and hearing-impaired). Last month, Power's book, “The Curve Ahead: Discovering the Path to Unlimited Growth," was released and he took some time to talk with me about innovation in tech and education.

Here's our conversation, which has been edited for length:

Q: How are you using your skills that you've developed in business and technology in your current role?

A: My insight has been that by understanding who you're serving today and what problem you're solving, you can be aligned around doing what you do better but also uncover opportunities for future growth. An idea as simple as that is not common practice in organizations low tech and high tech, public sector and private sector. We continue to reinvent and extend the model. And I view my challenge and opportunity at Perkins is to think about what do we do next to lay the foundation for the next 185 years. I'm encouraging everyone here to think about how we stay relevant using the same concepts that I wrote in "The Curve Ahead."

Q: Can you define what unlimited growth means and how business leaders can adapt that into their own organizations?

A: I know that's a tall order. I forget who talked me into the word "unlimited," but I'll stand by it. Here's the thing: the problem is that growth organizations stop growing. And I asked myself, "Why do promising companies stop growing?" You see many, many, many promising companies that take off an interesting idea kind of hit the wall and flatten out at $20 million to $30 million and never achieve their potential to go public, to build a big business. If you look at M&A statistics in the software industry, something like 75 percent of all mergers and acquisitions are companies below $30 million in revenue. Way below. That's not a good outcome for anyone that's out to build that organization. Part of the tragedy in this is that growth companies are really, really important for our economy. Those organizations create more than two-thirds of the jobs in the economy. Large companies are almost net-zero contributors. And not as much as people think in startups... the net contribution is modest. Whether you're a manager or an investor, growth companies are vital.

These companies continue to flatten out and stop growing because their business models mature sooner than anybody expects. Intellectually, people know that business models mature. But entrepreneurs of growth-stage companies seem to be surprised over and over again by the fact that their revenue curves looks like an S. It takes off for a while and then it slows down and flattens. And the problem is that if you let it go too far, it's almost impossible to reignite growth. You lose momentum, you lose investor confidence, you lose employees and you start to this, this is not a growth company anymore. And you can take that S curve and stretch it, you can go international, you can go to new regions, but all you're doing is extending the existing business model. Kind of like Groupon, that's a single business model and they stretch and stretched. If you look at the revenue curve for Groupon, it's a beautiful S and it flattens out right after they go public.

How do you overcome that so that you can sustain growth for the long term? You have to find the next S curve. You have to find another business model before the current one runs out of gas in order to have unlimited growth. The real success models, Apple and Amazon, have sustained growth for a long time by having a series of S curves so that there's always some new source of growth. And unless you think that way, you run the high risk of running out of gas in the business model. The connection between the two curves is an innovation process and unless you have a continuous process for innovation, you'll never have that next S curve emerge in time.

Q: What are the four steps that you outline in your book detailing how a company can be innovative?

A: The four steps are learn, design, test and model. I sort of observed the best practices of innovative companies. One thing I've discovered is they all follow the same sequence. It always starts by learning from the customer what is the next problem you can solve for them. To do that, you have to get outside of the office. Not how to make the current product better, but how can you solve another problem they may have that may be a good fit for the mission of your organization. Because the innovation process starts not from laboratory experiments and sort of serendipity, it starts by uncovering an unsolved problem before someone else does. When you can do that, then you have a design challenge you can use to feed the next step of the process, which is design.

We want to find a lower-cost electronic braille device, let's say. Now you're in the design phase. Most organizations skip that first step. That's why we have the Segway, a transporting device by Dean Kamen that's a wonderful device, but they never began with who's the customer and what problem we're trying to solve. It happens over and over again. The biggest source of waste in the technology industry is technology in search of a market.

Step three is to test or prototype. Before you go and build the solution, create some lightweight, low-resolution version and go back to the customer and say, "Like this?" You sort of iterate between test and design until you've pretty much got it right and then you're ready to commercialize. The last step, model, is don't assume you're going to use the same business model as your current product or service.

Q: Can you tell me what companies today in Massachusetts fit that model?

A: If you think about iRobot, they began with military robots and that funded their R&D. And then they found that by serving an entirely different market, the consumer, discovered they could take their technology — and with Roomba, they found they could make a robot vacuum cleaner. And they are looking at health care applications, where the robot can be a nurse or doctor. They're also looking at virtual conferencing.